Roberts v. National Transportation Safety Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 9, 2014 Decided January 23, 2015
No. 14-1022
JAMES L. ROBERTS,
PETITIONER
v.
NATIONAL TRANSPORTATION SAFETY BOARD AND FEDERAL
AVIATION ADMINISTRATION,
RESPONDENTS
On Petition for Review of an Order of
the National Transportation Safety Board
Deanna L. Weidner argued the cause for petitioner. With
her on the briefs was David B. Anderson.
Sonia K. McNeil, Attorney, U.S. Department of Justice,
argued the cause for respondents. With her on the brief were
Stuart F. Delery, Assistant Attorney General at the time the
brief was filed, and Michael J. Singer, Attorney. Michael E.
Robinson, Trial Attorney, U.S. Department of Justice, and
James A. Barry, Senior Attorney, Federal Aviation
Administration, entered appearances.
Before: WILKINS, Circuit Judge, and SENTELLE and
RANDOLPH, Senior Circuit Judges.
2
Opinion for the Court filed by Circuit Judge WILKINS.
WILKINS, Circuit Judge: In 2009, the Administrator of
the Federal Aviation Administration (FAA) suspended the
license of Petitioner James L. Roberts, an airplane mechanic,
for 120 days—and thereby also stripped him of his ability to
earn a living practicing his craft. After roughly a year and a
half of legal proceedings, the National Transportation Safety
Board (NTSB), which hears appeals from FAA orders,
vacated the suspension and found that the FAA’s position had
been unreasonable and not substantially justified. Petitioner
then sought recovery of legal fees and expenses under the
Equal Access to Justice Act (EAJA), 5 U.S.C. § 504(a)(1), but
the NTSB denied fee-shifting on the grounds that Petitioner
failed to show that he had “incurred” the fees associated with
his legal defense in the license suspension proceedings, as
required for an EAJA recovery. Even though the NTSB
ultimately rejected a finding that Petitioner’s employer had
agreed to pay the fees and also recognized that Petitioner’s
lawyers had not performed services pro bono, it still
concluded that Petitioner had not proved that he had incurred
the fees.
The question before the Court is whether the NTSB’s
conclusion was arbitrary and capricious. We hold that it was,
and that the NTSB should have considered that under the
Alabama law of quantum meruit, Petitioner was obligated to
pay his attorneys for the value of their services; as such,
Petitioner “incurred” fees and may obtain EAJA fee-shifting.
We therefore grant the Petition, vacate the decision, and
remand the case to the NTSB to determine the appropriate
amount of fees and expenses to award.
3
I.
At the time of the events in the underlying license
suspension proceeding, Petitioner was Director of
Maintenance for Alabama-based Darby Aviation (“Darby”).
In re Roberts, NTSB Order No. EA-5696 (2014), 2014 WL
581820, at *7 (“NTSB Fee Order”). In July 2009, the FAA
ordered a 120-day suspension of Petitioner’s mechanic
certification based on alleged regulatory violations including
returning an aircraft to service when it was not in airworthy
condition. See Administrator v. Roberts, NTSB Order No.
EA-5556 (2010), 2010 WL 4253063, at *1. Petitioner
contested the suspension before an NTSB Administrative Law
Judge (ALJ) through four days of evidentiary hearings held in
March and April 2010, after which the ALJ reduced
Petitioner’s suspension to 60 days.1 Id. Petitioner and the
FAA cross-appealed to the Board, which reversed the
suspension entirely on the ground that the FAA had failed to
present sufficient evidence to support its factual predicates.
Id. The FAA sought rehearing, which the Board denied in
January 2011. See Administrator v. Roberts, NTSB Order
No. EA-5568 (2011), 2011 WL 289248, at *3. Although he
initially appeared pro se, Petitioner was represented by
counsel in most of these proceedings.
1
“The Federal Aviation Act, 49 U.S.C. § 40101 et seq., establishes
a split-enforcement regime in which the FAA has regulatory and
enforcement authority, while the NTSB acts as an impartial
adjudicator.” Garvey v. NTSB, 190 F.3d 571, 573 (D.C. Cir. 1999)
(internal quotation marks omitted). Although the case is captioned
with NTSB as first respondent, the real parties in interest are
Petitioner Roberts and the FAA; the NTSB, as impartial
adjudicator, has a function “roughly analogous to that of a district
court.” Hinson v. NTSB, 57 F.3d 1144, 1147 n.1 (D.C. Cir. 1995).
4
On February 23, 2011, Petitioner filed an application
under the EAJA seeking $66,693.27 in fees and expenses of
the attorneys who represented him. The EAJA statute
provides in relevant part:
An agency that conducts an adversary adjudication shall
award, to a prevailing party other than the United States,
fees and other expenses incurred by that party in
connection with that proceeding, unless the adjudicative
officer of the agency finds that the position of the agency
was substantially justified or that special circumstances
make an award unjust.
5 U.S.C. § 504(a)(1).
In a written order on the fee application dated June 13,
2011, an NTSB ALJ found that the FAA’s position “was not
reasonable in law and fact, and was, thus, not substantially
justified.” NTSB Fee Order, 2014 WL 581820, at * 18. But
the ALJ also found that Petitioner had not incurred any
expenses under the statute. Id. at *21.
The ALJ agreed with the FAA that “the submission of a
billing that was addressed by [Petitioner’s] counsel to Darby
Aviation evidences that the attorney fees he seeks to recover
were not actually incurred by him.” Id. at *19. In reply,
Petitioner contended that it was immaterial that his counsel
also represented Darby and that an invoice had been
“inadvertently” sent to Darby. Id. Petitioner submitted an
affidavit from one of his attorneys, Deanna L. Weidner of
Anderson Weidner, LLC, attesting that Petitioner was “legally
obligated to pay for the fees and expenses associated with this
case” and had “agreed to pay any fee award” to the law firm.
Id. A second affidavit, from Darby’s CFO, attested that
Darby had “paid only a fraction” of Petitioner’s legal fees and
5
expenses and that Darby had “no express indemnity
agreement” with Petitioner. Id.
The ALJ also took issue with invoices submitted by
Anderson Weidner for work done in 2009, noting “that
applicant initially acted pro se in the underlying proceeding,
and made submissions on his own behalf as late as November
24, 2009, and that Ms. Weidner did not enter an appearance as
applicant’s counsel in that matter until February 1, 2010.” Id.
at 20. As a result, the ALJ held that Petitioner could not
recover fees for any services Anderson Weidner rendered
prior to February 1, 2010. Id. The ALJ further criticized time
billed for line items “clearly unrelated” to Petitioner. Id.
Given this, the ALJ found that “Darby Aviation was
responsible to Anderson Weidner, LLC, for payment” of all
legal fees and expenses in this case, and on that basis
concluded that Petitioner “did not incur the fees and expenses
for which he seeks reimbursement in this EAJA action.” Id.
at *21.
Another ALJ heard and denied Petitioner’s
reconsideration request in April 2012. Id. at *11. On further
appeal, the Board rejected the ALJ’s conclusion that Darby
had agreed to cover the costs of Petitioner’s representation,
but it nevertheless affirmed the denial of the application for
fees and expenses, finding that the “record lacks clear
evidence applicant personally ‘incurred’ fees for purposes of
the statute.” Id. at *5. This timely Petition for review of the
NTSB final order followed. See 5 U.S.C. § 504(c)(2).
II.
We review de novo the NTSB’s interpretation of the term
“incurred” fees as it appears in the EAJA statute, 5 U.S.C. §
6
504(a)(1). Green Aviation Mgmt. Co. v. FAA, 676 F.3d 200,
202 (D.C. Cir. 2012) (citing Turner v. NTSB, 608 F.3d 12, 14
(D.C. Cir. 2010)). “[B]ecause the EAJA is a statute of
general application, we do not defer to any one agency’s
interpretation.” Turner, 608 F.3d at 14. We review the
NTSB’s reasoning in its decision under the Administrative
Procedure Act’s familiar arbitrary and capricious standard, 5
U.S.C. § 706(2)(A), and the NTSB’s factual findings are
binding on us so long as they are supported by “substantial
evidence,” 49 U.S.C § 44709(f). See Singleton v. Babbitt, 588
F.3d 1078, 1082 (D.C. Cir. 2009).
A.
“Neither EAJA nor the legislative history provides a
definition of the word incur.” Ed A. Wilson, Inc. v. Gen.
Servs. Admin., 126 F.3d 1406, 1408 (Fed. Cir. 1997) (quoting
SEC v. Comserv Corp., 908 F.2d 1407, 1413 (8th Cir. 1990))
(internal quotation marks omitted). Both Petitioner and the
FAA tell us we must determine what “incur” means in this
context.
The FAA urges us to apply a dictionary definition and
commends us in particular to the current edition of Black’s
Law Dictionary. See BLACK’S LAW DICTIONARY 836 (9th ed.
2009) (to “incur” is “[t]o suffer or bring on oneself (a liability
or expense)”). The NTSB reasons from this definition in its
opinion below and the FAA argues in its brief here that “an
applicant who has no personal responsibility ever to pay legal
fees and expenses has not ‘incurred’ fees and expenses and
therefore is not eligible under § 504 for an award.” The FAA
also contends that Petitioner “cites no authority for the
proposition that the mere possibility of state law liability
alters whether a party has ‘incurred’ fees within the meaning
of EAJA.”
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But it is the FAA’s position—that the absence of a
written agreement is dispositive in determining whether a
party has “incurred” fees within the meaning of EAJA—that
is without authoritative support. The edition of Black’s Law
Dictionary that was current when Congress enacted the EAJA
in 1980 defines “incur” to allow that a liability may be created
other than by contract. BLACK’S LAW DICTIONARY 691 (5th
ed. 1979) (stating that to “incur” is “[t]o have liabilities cast
upon one by act or operation of law, as distinguished from
contract, where the party acts affirmatively”). Petitioner
argued to an ALJ and to the Board that his employers had not
agreed to pay his legal fees and expenses and that he was
personally “obligated to pay the attorneys who defended him
in the enforcement action.” NTSB Fee Order, 2014 WL
581820, at *3; see id. at *8. It was arbitrary and capricious
for the NTSB to reject the possibility that a claim in quantum
meruit creates a liability for the reasonable value of services
rendered notwithstanding the lack of any valid contract. See
RICHARD A. LORD, 23 WILLISTON ON CONTRACTS § 62:7 (4th
ed. 2010) (“[W]here there is no express contract, a party’s
acceptance of, or acquiescence in, the services rendered by an
attorney will raise an implied promise to pay for the services,
unless the circumstances show that the services were intended
to be gratuitous.”).
The NTSB was required to look to Alabama law because
it was the natural source of authority for Petitioner’s claim
that he was obligated to pay his attorneys even absent a
written contract. See RESTATEMENT (THIRD) OF RESTITUTION
AND UNJUST ENRICHMENT § 1 cmt. a (2011) (describing
unjust enrichment as an independent basis of liability in
common-law legal systems); see, e.g., Glick v. U.S. Civil
Serv. Comm’n, 567 F. Supp. 1483, 1489 (N.D. Ill. 1983)
(finding in collateral dispute to EAJA fee award that, without
8
a contract, state law of quantum meruit entitles an attorney to
the reasonable value of services rendered to the client). And,
as it happens, Alabama law provides that Petitioner was
legally responsible for paying his attorneys under the theory
of quantum meruit. See, e.g., Jacks v. Sullinger, 224 So. 2d
583, 585 (Ala. 1969) (“[T]he law implies a promise to pay a
fair and reasonable compensation for services rendered to
another which are knowingly accepted.”). In a case involving
a claim for recompense by private counsel retained by the
State’s Governor, the Supreme Court of Alabama held that the
attorneys were entitled “to a reasonable fee” for their work,
even where there was no valid contract for the work
performed because the retainer agreement was void ab initio.
State v. Am. Tobacco Co., 772 So. 2d 417, 422-23 (Ala.
2000). Indeed, the availability of quantum meruit recovery by
attorneys in Alabama appears “well established.” See Triplett
v. Elliott, 590 So. 2d 908, 910 (Ala. 1991); see also Lewis v.
Haskell Slaughter Young & Rediker, LLC, 582 Fed. Appx.
810, 814 (11th Cir. 2014) (affirming fee award based on
quantum meruit theory in Alabama law).
Against this argument the FAA musters before this Court
Tyson & Arrington v. Thompson, a century-old case that it
submits for the proposition that a contract “may be implied
only when an attorney demonstrates a reasonable expectation
of being paid by the person whom counsel seeks to hold
liable.” 70 So. 649, 651 (Ala. 1915). But Tyson & Arrington
does not do the work needed to justify the NTSB’s
reasoning—it stands merely for the proposition that the
provider of officious or gratuitous services may not recover in
quantum meruit. See id. In other words, Alabama law
implies a promise to pay compensation for services rendered
to another that are knowingly accepted except that “one may
not recover for services gratuitously rendered to another with
no expectation of payment.” Jacks, 224 So. 2d at 584. No
9
one argues here that Petitioner’s attorneys provided their
services gratuitously.2
The NTSB did not perform any of this analysis. Instead,
the Board reasoned that even though it could not conclude
that Darby had agreed to pay Petitioner’s attorneys, and even
though the attorneys gave deposition testimony that they were
not working pro bono, Petitioner had not proven that he was
responsible for paying the fees because the invoices did not
clearly say so. This defies logic. Cf. Vance v. Heckler, 757
F.2d 1324, 1327-28 (D.C. Cir. 1985) (administrative decision
refusing to credit “process of elimination” was unsupported
by substantial evidence). And it ignores the quantum meruit
obligation, as described above. The Board treated the lack of
an express contract as dispositive, but it erred in doing so.
The NTSB decision denying fees was therefore arbitrary
and capricious because it failed to consider state law that was
essential to its determination of whether Petitioner had
incurred fees under the EAJA.
B.
Although we hold that the NTSB acted arbitrarily and
capriciously in declining to consider state law showing
Petitioner had incurred fees for his legal representation—and
2
Had such an argument been made, Petitioner would not have a
quantum meruit obligation to his attorneys but would be entitled to
recovery for a different reason in that the EAJA allows recovery for
pro bono representation. See Am. Ass’n of Retired Persons v.
EEOC, 873 F.2d 402, 406 (D.C. Cir. 1989) (holding that fee-
seekers could gain reimbursement pursuant to the EAJA for their
pro bono counsel). The Board expressly recognized this point. See
NTSB Fee Order, 2014 WL 581820, at *4 n.33.
10
based on that law, we hold that Petitioner did incur fees
entitling him to fee-shifting—we emphasize several issues we
do not decide and that we leave open on remand to the NTSB.
First, not all of the fees and expenses submitted in this
case are necessarily eligible for reimbursement. An NTSB
ALJ noted that some of Anderson Weidner’s charges were for
work done before it became counsel of record for Petitioner.
NTSB Fee Order, 2014 WL 581820, at *20. Other itemized
billings appear to have been for unrelated work performed for
Darby, such as “issues on sale of business.” Id. We do not
mean to say that fees for these services have been “incurred”
by Petitioner.
Second, we do not foreclose an exploration by the NTSB
on remand of whether “inadequate documentation, failure to
justify the number of hours sought, inconsistencies, and
improper billing entries” should reduce the reimbursement
allowed in this case. Role Models America, Inc. v. Brownlee,
353 F.3d 962, 973 (D.C. Cir. 2004). Even though the
documentation deficiencies cannot preempt the state law that
shows Petitioner has “incurred” fees, those deficiencies may
factor into the question of how much reimbursement is due.
See, e.g., Allen v. NTSB, 160 F.3d 431 (8th Cir. 1988) (per
curiam) (holding that reduced award was appropriate due to
failures of documentary evidence). On remand, the NTSB
may consider which submitted fees and expenses were
supported by sufficient documentation and whether a
reduction in award is appropriate in these circumstances.
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III.
For the reasons stated in this opinion, the NTSB’s
conclusion that Petitioner did not “incur” legal fees and
expenses within the meaning of 5 U.S.C. § 504(a)(1) was
arbitrary and capricious. Accordingly, we vacate the NTSB’s
decision and remand the case for determination of the
appropriate award under that statute.
So ordered.